PowerPoint Presentation by Charlie Cook Copyright © 2005 South-Western. All rights reserved. Module 9 Organizational Action in Complex Environments

Copyright © 2005 South-Western. All rights reserved.9–2 Strategic Design Perspective: “Organization Set” Organization set model maps resource environment in terms of input set and output set  Input set includes organizations that provide required inputs (materials, components, human resources, financial resources, technology, knowledge)  Output set includes customers for organization’s output of goods and services as well as distributors, retailers, service organizations, etc. Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–3 Strategic Design Perspective (cont’d) Two additional elements of organization set:  Regulatory set—organizations with formal authority to regulate internal processes, size of input and output sets, and kinds of relationships organization is allowed to build  Set of competitors—competitors may also be parts of input set Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–4 Figure 9.1 Strategic Design Perspective: The Organization Set Model Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–5 Strategic Design Perspective (cont’d) Internal inking mechanisms  Liaison or integrator positions  Temporary boundary-spanning groups  Permanent boundary-spanning groups  IT systems Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–6 Strategic Design Perspective (cont’d) External linking mechanisms  Performance measurement systems  Incentive systems  Resource allocation  Human resource development Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–7 Political Perspective: Stakeholders Model Distinction may be made between internal and external stakeholders Stakeholder model focuses on two key variables:  Interests  What does each set of stakeholders want?  How clearly defined are those interests?  What are the priorities assigned to those interests, and can priorities be altered?  Power and influence  What is the basis of power or influence of each set of stakeholders over the organization? Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–8 Figure 9.2 Political Perspective: Stakeholders Model Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–9 Political Perspective (cont’d) Key tools for action in organization-environment relations:  Mobilization of the interests of external stakeholders  Coalition-building between internal and external stakeholders and among external stakeholders  Cooptation as one stakeholder or set of stakeholders gets others to accept its own agenda, either through persuasion or through offering to further their interests in some way Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–10 Political Perspective (cont’d) External stakeholders generally have a lower stake in an organization than internal stakeholders External stakeholders can use influence over organization to obtain outcomes desired by a set of internal stakeholders External stakeholders can use same key tools for action to influence an organization Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–11 Cultural Perspective: Institutional Fields Shared ways in which people see and interpret social context are as important to understanding organizations as resources and power Organizations are embedded in a social system of expectations, taken-for-granted ways of doing things, status, and legitimacy Institutional field concept analyzes interactions between organizations and their environments Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–12 Cultural Perspective (cont’d) Institutional field  Key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products Institutionalization  The process by which certain organizational patterns come to be accepted as legitimate, as the right way or only way to do things Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–13 Cultural Perspective: Institutional Field Model Figure 9.3 Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–14 Cultural Perspective (cont’d) Isomorphism  The processes by which organizations become similar to others in their field  Coercive isomorphism—when a powerful organization or stakeholder imposes its structural and procedural demands on an organization  Normative isomorphism—when professional or interest groups insist that such patterns are the “right” way to do things  Mimetic isomorphism —when organizations take successful organizations as their models Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–15 Cultural Perspective (cont’d) Institutional field model has displaced older concept of national culture National culture models don’t allow for:  Variations within countries across corporate cultures  Changes occurring in organizational patterns over time Institutional field model addresses both these points Institutional field model is at the center of debates over globalization Class Notes: Organizations and Their Environments

Copyright © 2005 South-Western. All rights reserved.9–16 Integrating Perspectives Organization set model focuses on how tools of organization design can be used to improve interorganizational relationships Stakeholders model directs attention to how external stakeholders can influence organization decision making Institutional field model highlights importance of external models, legitimation, and attention from external structuring agencies Class Notes: Organizations and Their Environments